When Is a Market Not a Market?

by on September 22, 2005

. . . When it’s regulated!

TechDirt has a post and (first) comment about FCC reform yesterday afternoon that epitomizes a problem with debates about regulation: Speaker complains of practices in a particular industry, posits increased regulation as the solution. Existing regulation is ignored, while “the market” is blamed for problems. Because of various beefs with telecommunications service (today, under regulation), the consensus (of two people, anyway) on TechDirt is that there should be more telecommunications regulation.

Gang, it’s sort of definitional that, in heavily regulated industries, regulation predominates over market forces. Where there is little or no regulation, market forces predominate. Take medical marijuana in San Francisco which, due to differences of opinion among the local, state, and federal governments, is about as little-regulated a market as we know of. There is plentiful, high-quality product with a variety of providers in friendly competition. No one is getting ‘screwed’ and, in fact, the providers of medical marijuana are as committed as patients and care-givers to providing palliative care. Elsewhere in the country, where marijuana (medical and otherwise) is very heavily regulated, to the point of prohibition, people are getting screwed: high prices and low quality (on down to bunk) – and they’re getting robbed, shot, and stabbed sometimes too.

Verizon has called for real FCC reform, under which, perhaps, market forces will predominate. The argument against, as I pointed out on TechDirt, is: We’re unhappy with the status quo so we want more of the same.

P.S. I don’t smoke pot – so save it.

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